Good Or Bad News? BRI Predicts Bank Indonesia Will Raise Interest Rates To 4.50 Percent In 2022

Illustration (Photo: Doc. Antara)

JAKARTA - Chief Economist of PT Bank Rakyat Indonesia Tbk. (BRI), Anton Hendranata estimates that Bank Indonesia will most likely not continue to maintain a low-interest rate of 3.50 percent throughout 2022.

"There is a potential for an increase in the benchmark interest rate of Bank Indonesia (BI), namely the BI-7 Days Reverse Repo Rate (BI-7DRR)", he said in a press statement on Monday, December 27.

According to Anton, it is believed that the monetary authority will increase the interest rate by 100 basis points next year.

"BRI estimates that the BI-7DRR will increase to 4.25 percent to 4.50 percent or higher than the current position of 3.50 percent", he said.

Anton himself hopes that the rise in the BI rate will not affect economic activity too much so that the company's performance will remain optimal in the next 12 months.

"By continuing to control the COVID-19 pandemic, BRI believes that lending can be maintained even though the central bank's interest rates may rise", he said.

Third Quarter 2022

In the previous VOI report, Bank Indonesia Governor, Perry Warjiyo, revealed that the interest rate change will only occur in the second half.

"The fastest Bank Indonesia rate increase will occur in the third quarter of 2022", he said through a virtual channel on Friday, December 24.

Perry added that the main indicator that is used as a reference for the central bank in updating interest rates is the movement of domestic inflation.

“We will continue to pay attention to inflation developments, especially core inflation. If inflation essentially rises, the interest rate will adjust", he said.